Marketing Strategy

Marketing Strategy • • • • • •

The management process – Formulate plans & strategies Implement marketing programme Control all marketing activities Planning provides the basis for integrated marketing strategy.

Marketing Strategy • control Data input planning execution • • • Action plan Operating results • • Data feedback • • The management process in marketing

Marketing Strategy • Planning –planning is deciding in advance what to do ,how to do & who is going to do it? • It is the first function in management to be performed in the management process. • Planning is analytical thought process which covers – Ø Analysis of the situation or environment Ø Assessment of the future opportunities & threats Ø Determination of objectives & goals Ø Selection of best strategy to achieve

Marketing Strategy • Planning & control – are twin management function. • Without planning controlling can’t be accomplished. • In general practice, planning-actioncontrol is a continuing cycle & these functions are difficult to separate.

Marketing Strategy • Role of business planning – • Business planning enables management to establish most favorable relation between the organization & the environment. • The major task of managerial leadership is that of integrating all elements of marketing mix to accomplish marketing objectives. • The success of business depends on – • Ample resources in the enterprise (input) • Fulfilling needs of the customer(customer satisfaction-output)

Marketing Strategy • Competition is a key element in a company’s marketing opportunity. • Strategic planning is based on the assessment of the competition. • Customer needs are influenced by PEST. • Hence marketing executives must have adequate information regarding changing environment & factors influencing customer needs.

Marketing Strategy • Importance of planning – proper planning enables manager to carve out the future course of action. • Marketing planning of an organization is planning for that organization’s revenue earning activities. • Planning must begin with setting down the corporate objectives & should followed with strategies.

Marketing Strategy • Importance of marketing planning – it includes Ø Identification of future development Ø Consideration of opportunities & threats Ø Focus on objectives Ø Profitable employment on resources Ø Facilitates co-ordination Ø Helps in avoiding future uncertainties Ø Helps in achieving objective Ø Helps in co-ordination & communication among the various departments Ø Helps in control

Steps in marketing strategic plan • Determine the mission objectives & goals • Develop a company profile that reflects internal conditions & capabilities • Analysis of company’s external environment in terms of both competitive & general factors • Strategic formulation of long term objectives

Strategy • It is a dynamic action oriented formal general plan to accomplish company mission as well as objective. • Strategy includes• Awareness of mission, purpose & objectives. This provides the central concept of planning-indicating what is our business, who are our customers, what goods & services shall business supply? • Recognition of the unpredictability & uncertainty of events indicating business environment. • Need to take into account probable behavior

Strategy • An enterprise must have at least two major broad objectives1.To do the right things 2.To do the things right. • Strategic planning reflects the first objective while planning reflects the second.

Strategy… • Strategy of a company is designed in such a way that it matches with – Future environmental marketing opportunity – Capabilities of companies human and material resources – Top management values and beliefs – Desired social economic objectives 

Strategy… • Strategy has three elements

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– Mission and basic objective said by top management – Pattern of actions to follow – Allocation of human and material resources to execute the plan and to accomplish the set of objectives Strategy acts as a bridge between objectives and action plan –

Strategy… • Corporate Strategy formulation – There are four steps – Determination of corporate objectives – Generation of alternative business opportunity – Selection of the best opportunity – Implementation of the chosen line of action 

Strategic Corporate Planning There are five steps • Environmental scanning • Defining corporate mission • Setting objectives • Identifying strategic business units • Selecting appropriate strategies 

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Strategic Corporate Planning • Environmental scanning – External Environment – Business environment is scanned to secure up to date information on opportunities and threats revealed by the changing environmental forces such as customers customer needs, competition, economic, social, political ecology and technology – Internal Environment • Marketers must also have adequate knowledge of internal situation through self analysis i.e. on corporate strengths and weakness • There should be happy marriage between the company resources and company opportunities so that the marketer can accomplish the corporate goals • Marketing information and research enables business to scan the external environment. Sales audit and cost analysis enable to study

Strategic Corporate Planning • Defining corporate mission – The statement of basic purpose offers customer oriented answers to few questions. E.g. what is our business? What is our customer? What is our goal? The mission focuses the attention on the fundamental customer needs. – Example of mission • Telecommunication • Xerox • Cosmetic company

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Strategic Corporate Planning • Setting Objective – The mission answers the question : What is our business? The objectives answer the question : What do the business want to achieve? – Objectives must be clear, ambitious, realistic but measurable and time bound – The mission points out the needs to be served – The objectives indicate performance standards. E.g. market share, profit,

Strategic Corporate Planning • Identifying strategic business units – In order to identify SBU, a business is defined on the basis of customer orientation in terms of three dimensions • Customer needs to be met • Group of customers to be served • Product or service to fulfill those needs

– The SBU has three features • Collection of related products meeting similar needs • The unit has its own rivals and it wants to surpass them through best marketing strategies • The manager of SBU organization is directly responsible for strategic

Strategic Corporate Planning • Selecting appropriate strategies – There are four alternative strategies • Invest strategy – Marketing efforts are intensified further to strength the SBU • Protect strategy – The SBU will be given help to maintain its present position in the market • Harvest strategy – The SBU is used as a cash flow source to help other SBUs to grow or maintain position • Divest strategy – The sick or unwanted SBU may be just sold out

Strategic Marketing Planning It involves four steps • Situation Analysis 

– It is the starting point in all planning activities – It gives information on market demand, market environment and performance – It reviews the existing marketing mix thoroughly

• Marketing objectives and strategies – These at the marketing levels are closely aligned with corporate objectives and strategies

Strategic Marketing Planning • Segmentation and Target marketing – In a new company segmentation enables the company to identify potential target market – Firm has to ascertain sales forecast in its target markets

• Marketing Mix – A distinctive marketing mix is prepared to satisfy target market demand and attain marketing objectives for each target market – It helps to build best integration of product, price, promotion and distribution strategies

Annual Marketing Plan • Strategic marketing planning leads to the development and carrying out of an annual marketing plan • The marketing plan will have the following items – Sales objectives for all the company divisions and products – Total budget of money and resources for supporting marketing efforts – A statement describing how the firm will allocate its efforts amongst the 4P’s – The marketing budget allocation by products which states how much emphasis each product will receive

Annual Marketing Plan • Annual marketing plan is a short term, covering 1 year • Each marketing plan incorporates strategies and tactics relating to the marketing mix for a particular target market • Overall corporate mission, corporate objectives and corporate strategies are determined by top corporate managements under business planning

Competitive Marketing Strategies • With the entry of MNCs, Indian industrialist are concerned about the future. Hence it is required to make competitive marketing strategies in today’s business world • There are various ways of tackling competition – Reducing competition through the acquisition of smaller or weaker units that pose a threat to the company – Joining competition as in the case of JV between P&G and Godrej soaps – Creating entry barriers by raising spending levels in the market – Pricing products very low to threat the entry

Competitive Marketing Strategies – Differentiating one’s own brands to provide better value for money – Upgraded technology – Making available more resources on time to time basis 

Portfolio analysis • BCG Matrix – a popular approach to planning, called portfolio analysis was found in USA by the Boston Consulting Group. • This method identifies the company’s SBU & places & places these on matrix that considers market growth & market share. • Four business types can be distinguished : 1.Stars 2.Cash cows 3.Question marks 4.Dogs

Portfolio analysis 1. Stars – these are SBU’s that have promising future. • Significant investment of cash are necessary to develop their full potential. 2. Cash cows – have achieved high market share in a mature market • Deserve the company’s full attention because the cash generated be properly invested in newer market areas with high growth potential. 3. Question mark – growth prospects are good but have low relative market share. 4. Dogs – no growth potential & relative market share is very low.  

BCG model was originally designed for multi-industry companies.

Po rtfo lio a n a lysis Star

Question mark

Cash cow

dog

Portfolio analysis • The general electric (GE) matrix – slightly different from BCG. • It uses business strength on the horizontal axis & industry attractiveness on the vertical axis. • Each of the boxes suggests a strategy appropriate for the SBU’s that it contains. •

Portfolio analysis

Invest for growth

Selectively invest & Develop for income build Invest selectively & Develop selectively Harvest or divest build for income Develop selectively

Harvest

divest

• Generic Marketing Strategies – Cost Leadership • Lower costs of production and distribution • – Differentiation • Unique product or brand • – Focus • Focus on customer needs in a few segments – Problems with BCG Approach • Difficult to estimate relative market share in rapidly growing markets 